The Government has announced that the maximum compensatory award for unfair dismissal will rise on 6 April 2015 from £76,574 to £78,335. Also, the maximum amount of a week's pay, used to calculate statutory redundancy payments and various awards including the basic and additional awards for unfair dismissal, will rise from £464 to £475. The effect of these changes will mean that the maximum statutory redundancy payment will increase in April 2015 to £14,250.
The increase corresponds to a RPI rise of 2.3% in the year to September 2014.
Although expected, the proposed changes are a signpost for employers currently thinking of making redundancies. The new figures will apply where the employee’s termination date is on or after 6 April 2015. Therefore redundancies which take effect before 6 April 2015 will avoid the additional cost planned, which is an important factor for employers to bear in mind.